By DIAA HADIDAssociated Press

This latest flare-up, triggered by a shoot-out last week between Kurdish guards and Iraqi police, reflects longstanding grievances between the two sides over how to share natural resources, territory, and power dating back to the 2003 U.S.-led invasion that toppled longtime dictator Saddam Hussein.

Both sides have forces in the provinces bordering the Kurdish autonomous zone, but any new deployments are seen as a provocative show of force by one side to assert dominance over the other.

Relations took a step back in October, when Iraqi Prime Minister Nouri al-Maliki formed a new military force to oversee command of the security forces in the area, that include several disputed cities and swaths of oil-rich territory claimed by Iraqi Arabs, Turkomen and Kurds.

On Wednesday, the Kurds sent troops into the disputed town of Khanaqeen, claiming that it was a routine redeployment.

Baghdad's military spokesman Col. Dhia al-Wakeel said that Kurdish regional forces known as the peshmerga, backed by rocket launchers and artillery, reinforced troops already in Khaniqeen and the nearby oil center of Kirkuk on Thursday, "despite efforts to produce calm."

Al-Wakeel said some were in civilian clothes. He would not elaborate further.

Jabar Yawer, a spokesman for the peshmerga, said their troops had not advanced. "It is exactly the opposite," he said, accusing Iraqi commanders of sending artillery-backed forces to seven different disputed areas bordering the Kurdish region over the past few days.

"Maliki just wants to create problems and war," Yawer said. He said tensions could only be diffused with an international force patrolling the disputed area, as U.S. forces once did.

Tensions in the region escalated on Friday, when a gun battle between Iraqi police and Kurdish guards in the disputed northern city of Toz Khormatu left a civilian dead and four policemen wounded.

One-third of Iraq's considerable oil wealth is in the Kurdish region, which holds up to 45 billion barrels in reserves.

Kurdish officials have unilaterally signed scores of oil deals with mostly mid-sized oil companies offering terms more generous than Baghdad's, prompting the central government to blacklist those companies.

Kurdish officials have also allowed oil companies to operate in disputed areas, although their ownership has not been settled.

Iraq's central government fears those areas could slip from its control, which is partly why it has reinforced its troops in the area.

Political efforts to try resolve the tensions continued Thursday as Iraq's parliament speaker Osama al-Nujeifi went to the Kurdish city of Erbil to meet with leaders there, an aide said.

Any deterioration into actual fighting in the broad swath of northern Iraq could spread into Turkey, which has a large Kurdish minority. On Wednesday, the Turkish prime minister said his government feared the Iraqi central government was dragging the country toward internal conflict.